Calculate the Effective Rate of Protection for the Domestic MP3

question 32

Multiple Choice

Calculate the effective rate of protection for the domestic MP3 player industry following the imposition of a 20 percent tariff on the imports of MP3 players. The cost of material inputs used in production of MP3 players in the country is $100 per unit and there is free trade in these material inputs. The world price of MP3 players is $175 per unit. Assume that the country is a small country.

• A)20%
• B)46⅔%
• C)90%
• D)72⅔%

---

Definitions:

Data Tools Group

A set of tools or features in spreadsheet and database software aimed at helping users manage, analyze, and manipulate data.

Solver

A functional tool in software programs, such as Excel, designed to find optimal solutions to complex mathematical models or equations by varying multiple inputs.

Target Cell

In spreadsheet software, a specific cell that is designated for a particular purpose, such as the cell where a formula's result is displayed.

Changing Cells

Cells in spreadsheet software designated for modification, influencing the outcome of formulas or functions dependent on their values.